Chairperson, thank you very much for this opportunity. Let me recognise hon Minister Shabangu, Ministers and Deputy Ministers here present, hon members and the acting chair of the portfolio committee, Ms Bikani, the director-general and senior officials of the department, senior executives of state-owned enterprises and the private sector, trade union leaders here present, religious and traditional leaders. Ladies and gentlemen, comrades and friends, let me start by first and foremost wishing the chairperson of the Portfolio Committee on Mineral Resources, Comrade Fred Gona, a speedy and full recovery.
I also wish to express appreciation for this opportunity to address this Chamber on the occasion of our Budget Vote for 2013-2014. I am particularly mindful of the month of May, which is acknowledged for its historical significance, namely the incarceration of former President Nelson Mandela on Robben Island 50 years ago on 27 May and the formation of the Organisation of African unity, now the African Union, also 50 years ago, to name but a few events of significance.
But, most importantly, May is considered Workers' Month. On Workers' Day this May, we are reminded all over the world that social development assumes meaning only when the economy consciously and actively promotes the wellbeing of the working class and the poor. Focusing on poverty alleviation and the welfare of the working class does not necessarily mean neglecting the broader interests of society.
Hon Lorimer, I see that you still begrudge those white, pale German philosophers. I can understand, because they mobilised society and especially the working class and the poor to stand up against the apartheid capitalism that you held so dear. I can tell you that you have lost it and you will never get it back. I can assure you that broad-based black economic empowerment, BBBEE, is here to stay. Those black miners that you see around here are not tokens; they are professional miners in their own right. So, you can eat your heart out, but BEE is here to stay. [Applause.]
This is particularly pertinent for us in South Africa, given the prevailing industrial relations disturbances within the economy and in the mining sector in particular.
The current conditions remind us that despite considerable progress made since the dawn of democracy in 1994, we still have a long way to go to reach a point at which the relative earnings within the economy are conducive to rising standards of living. It is a fact that mineworkers' living conditions have not changed sufficiently, and, by all accounts, remain below all our expectations since 1994. This is not helpful for productivity enhancement and for the stability of operations in the industry. As such, I firmly believe that it remains our collective responsibility to deal with the remaining issues with haste and composure. It is particularly noteworthy that ever since the 1920s, the mining sector in South Africa has been the arena for highlighting excessive income disparities and earnings inequalities within society. Clearly, history has shown beyond doubt that such structural issues need resolution once and for all - the sooner they are resolved, the sooner the mining industry will resume the stability and predictability that is so badly needed for the growth and development of the sector.
The mining sector is far too important for our country and for our social welfare to be left saddled with unfinished structural difficulties. Importantly, the resolution of these issues requires multistakeholder commitment.
Let me remind this Chamber once more about a resolution taken by Parliament seven years ago, on the occasion of the 60th anniversary of the 1946 mineworker strike. The National Assembly resolved that the living and working conditions of mineworkers must be investigated further and be improved; to support the initiative by the National Union of Mineworkers to build a workers' museum; that Parliament give consideration to naming some of its buildings after J B Marks, a leader of the African Mineworkers Union, and other heroes of the struggle. That is the resolution of Parliament.
South Africa is one of the oldest mining jurisdictions in the world. We have over 100 years of mining experience, expertise and knowledge, and we are, indeed, respected for this throughout the world. To date, we are still the richest country in the world, with more than 100 years of mining still ahead of us. So, mining does matter for to in South Africa. [Applause.]
On 1 May 2014, Workers' Day, we shall be celebrating the 10th anniversary of the Mineral and Petroleum Resources Development Act, MPRDA. This is a solid piece of legislation that has changed the minerals and mining landscape in South Africa. We wish to thank those who spent sleepless nights developing this revolutionary piece of legislation. For many years, the prophets of doom claimed that the MPRDA provisions amounted to the expropriation of property without compensation.
Today, we must also celebrate our recent victory in the Constitutional Court. Many so-called mining law experts have claimed that the MPRDA is unconstitutional and that its provisions amount to expropriation. These voices have been silenced forever. The department has won the debate. In a landmark decision, the Constitutional Court said that the transitional arrangements were so carefully designed as to alleviate potential hardship and prevent expropriation. This shows the genius of the public servants who drafted the MPRDA. [Applause.] Let those who think that the Public Service only employs those who cannot find jobs in the private sector be silenced for ever as well. The MPRDA was not drafted by lawyers in private practice. This piece of legislation was drafted by officials who were employed by the then Department of Minerals and Energy. We salute them.
Let me also inform this august House what the Constitutional Court said, and I quote:
The MPRDA constitutes a break through the barriers of exclusivity to equal opportunity and to the commanding heights of wealth-generation, economic development and power. It seeks to address the injustices of the past in the economic sector of our country in a more balanced way, by treating individual property rights with the care, fairness and sensitivity they deserve.
If the Constitutional Court labels the MPRDA as a break through the barriers of exclusivity to equal opportunity and the commanding heights of wealth generation, let's ensure that our people feel the warmth of this legislation. Our expectation in 2014 will be full compliance with the MPRDA and the Transformation Charter. This is non-negotiable.
As we deal with the structural issues, we should be ever mindful of the manner in which we resolve issues and the way in which we communicate the rationale and the outcomes to the broader investment community. It is stating the obvious that our collective national interest is in our own hands. We need to take extreme care that we do not unnecessarily and inadvertently undermine our country's brand and our collective ability to attract investment to this sector and its associated industries.
In addition to matters related to industrial relations, there are other structural issues that also need careful attention and conclusive resolution. All over the world, the mining industry is synonymous with the destruction of the environment, land disposition and the use of land that is potentially useable for agriculture and food production. Such dichotomies have to be managed carefully and responsibly via sound and concurrent environmental rehabilitation management practices.
Globally, the extractive industries have come under the spotlight. As hon members are aware, the G8 leaders are focusing on this sector, not only owing to issues of tax evasion, but also because of the broader factors that have turned the blessings of natural endowment to what is now referred to as "the resource curse" - a term encompassing the multifaceted damage that mineral endowment imposes on political stability, and on societies and communities that are rich in natural resources. How ironic, how very ironic, that the very resources that should and could be used to initiate and accelerate socioeconomic development, turn out to be a curse on the environment and sociopolitical stability.
Surely, this is the time to break with the past and reverse the patterns of historic instability in this sector into a framework for a coherent and integrated developmental process. I would like to believe that our mining sector stakeholders in South Africa are well aware of their joint destiny and have had sufficient historic experience to be able to discharge their patriotic responsibilities towards our country and its people.
The turbulent state of the mining sector calls for urgent and meaningful commitment to our collective patriotic responsibilities, with a view to setting up our mining sector for success.
It is a well-known fact that our natural resource endowment is considerable and that we have at least another century of mining ahead of us. It is surely incumbent upon us to govern it differently, structure it differently and manage it differently to unlock its maximum socioeconomic benefits for our nation.
To this end, some basic building blocks of sustainable mining need effective attention. First and foremost, it is about weaknesses in occupational health and safety performance in the industry. We cannot underestimate the misery brought to widows and orphans owing to the failure to comply with health and safety standards. There is an urgent need to eliminate the fatalities and injuries that have characterised the mining industry for more than a century.
I must also say that there are companies that have done very well. There is improvement, and if I had more time I would give the statistics about improvements in health and safety, especially in the number of fatalities in the previous years.
Next in line of priorities is the approach to environmental management, rehabilitation and, more broadly, the greenification of mining operations. This broader term pertains to a large number of factors such as energy efficiency, concurrent rehabilitation, prior planning for post-mining activities and the like. What is not acceptable and, indeed, highly undesirable is the neglect shown by many mining houses and companies with respect to environmental management. In the recent past, we have had high- profile cases of acid-mine pollution and contamination and the social pain caused by asbestosis. We are still seized with the long outstanding matter between the Kgatelopele asbestos community in Kuruman and the Asbestos Relief Trust, and we hope to find some resolution as soon as possible. This is indicative of the extent of care that needs to be taken, not only by the regulators, but also by the industry to avoid further damage to the socioeconomic fabric of our society.
Globally, it has also become clear that in areas of economic activity, legislation and legislative pressure have their limitations. We have seen such limitations in the financial sector with colossal social consequences.
The mining sector is no exception. Whilst appropriate legislation and adequate administrative capacity are important requirements, the role of compliance with the spirit of the legislation and alignment with broader national ideals cannot be underestimated. It is in this regard that we have reached a critical juncture in our mining sector, and I submit we have all that it takes to hammer out a sustainable growth path going forward.
Moreover, what is exciting and encouraging is that, despite all the unfavourable developments and the negative publicity around the challenges facing our mining sector, there is a great deal of goodwill and investor appetite for investment in our country. The reality is that if we see beyond the current cyclical downturn, the medium- to long-term demand for our mineral resources remains solid. Furthermore, there are many and major mining projects that are ready for implementation.
In our interactions with global and domestic mining houses, it is obvious that those who are long-term investors are committed to working with us and see beyond our short-term challenges.
Based on my recent interactions with the mining investment communities in Canada, Australia and South Africa, I am convinced that we have major projects that are shovel-ready in commodities such as manganese, zinc and platinum, to name but a few. Moreover, there is a growing realisation and willingness amongst the investor community for cross-border collaboration within our SADC region with a view to creating economies of scale and finding practical means of overcoming logistical bottlenecks. Opportunities for value addition are enormous and plans are already in place to start serious pilots in the near future.
Ironically, if we entertain a collaborative framework, much of what we now see as logistical bottlenecks can be turned into investment opportunities. We need to acknowledge that the cost base of our mining operations has risen sharply, and in the prevailing globally competitive environment our ability to maintain a desired investment destination hinges on our creativity to manage costs and do so in a timely manner. Both cost containment and timely interventions are critical.
As we reflect on the challenges and opportunities within the mining sector, we cannot be blind to the vast opportunities that our region offers. Possibly, for the first time in our history, our economy and that of our neighbours have a real chance of sustainable integration and industrialisation. To this end, the mining sector offers critical and exciting opportunities.
Getting the mining sector policy and operations right is not an academic goal or a theoretical nicety for us and our region. Rather, it is a matter of development or no development for many of our regions, communities and neighbouring states. It is therefore our collective obligation to ensure that this considerable wealth is utilised to generate socioeconomic benefits ...